Long-Term Debt and Capital

9 Months Ended

Sep. 30, 2011

Long-Term Debt and Capital

NOTE 8 – LONG-TERM DEBT AND CAPITAL

In March 2011, the Federal Reserve completed its review of the Company’s capital plan in connection with the CCAR. Upon completion of the review, the Federal Reserve did not object to the Company’s capital plan as originally submitted in January 2011. As a result, during the first quarter of 2011, the Company completed a $1.0 billion common stock offering and a $1.0 billion senior debt offering, which pays 3.60% interest and is due in 2016. On March 30, 2011, the Company used the proceeds from these offerings as well as from other available funds to repurchase $3.5 billion of Fixed Rate Cumulative Preferred Stock, Series C, and $1.4 billion of Fixed Rate Cumulative Preferred Stock, Series D, that was issued to the U.S. Treasury under the TARP’s CPP. As a result of the repurchase of Series C and D Preferred Stock, the Company, incurred a one-time non-cash charge to net income available to common shareholders of $74 million, related to accelerating the outstanding discount accretion on the Series C and D Preferred Stock. In September 2011, the U.S. Treasury auctioned a total of 17.9 million of the Company's warrants to purchase 11.9 million shares of SunTrust common stock at an exercise price of $44.15 per share (Series B warrants) and 6 million shares of SunTrust common stock at an exercise price of $33.70 per share (Series A warrants). The warrants were issued by SunTrust to the U.S. Treasury in connection with its investment in SunTrust Banks, Inc. under the CPP and have expiration dates of November 2018 (Series B) and December 2018 (Series A). In conjunction with the U.S. Treasury's auction, the Company acquired 4 million of the Series A warrants for $11 million.

The Company’s long-term debt decreased from $13.6 billion at December 31, 2010 to $13.5 billion at September 30, 2011. The change was primarily as a result of the $1 billion senior debt offering described above, offset by $852 million subordinated debt that matured in the second quarter of 2011 and the repurchase of $320 million of fixed rate senior and junior subordinated notes that were due in 2011 and 2036.

The Company’s common equity increased by $1.8 billion, primarily as a result of net income, the common stock offering, and an increase in AOCI due to higher unrealized gains primarily related to securities and derivatives. Conversely, Consolidated Shareholders’ Equity decreased by $2.9 billion from December 31, 2010 primarily as a result of the repurchase of the Series C and D Preferred Stock, partially offset by the new common share issuance. The Company’s capital ratios as of September 30, 2011 and December 31, 2010 are noted below.

	September 30, 2011				December 31, 2010
(Dollars in millions)	Amount		Ratio		Amount	Ratio
SunTrust Banks, Inc.
Tier 1 common		$12,188	9.31	%	$10,737	8.08	%
Tier 1 capital	14,531		11.10		18,156	13.67
Total capital	18,211		13.91		21,967	16.54
Tier 1 leverage			8.90			10.94
SunTrust Bank
Tier 1 capital		$13,873	10.75	%	$13,120	10.05	%
Total capital	17,048		13.21		16,424	12.58
Tier 1 leverage			8.74			8.33